Philippines approves ADB loan for financial sector

BSP Governor Amando M. Tetangco Jr. told reporters that the central bank’s Monetary Board has given its final approval to ADB’s $200 million Financial Market Regulatory Intermediation Program (FMRIP) Sub-Program 2 loan.

“This is intended to support the continuation of financial policy reforms taking into consideration the lessons learned from the global financial crisis,” Tetangco stressed. He pointed out that the primary objectives of the loan are to enhance financial sector stability, strengthen financial sector regulatory oversight, and improve financial sector efficiency and liquidity.

He said the loan also involves a technical component amounting to $80,000 to support the policy actions of the Securities and Exchange Commission (SEC) as well as the Insurance Commission (IC). According to him, the original amount of the loan was $300 million but was lowered to $200 million based on the availability of ordinary capital resources allocation from the ADB.

The loan carries an interest of six-month US dollar LIBOR plus 30 basis points and a commitment fee of 0.15 percent per annum. It has a maturity period of 15 years inclusive of a three-year grace period.

ADB’s FMRIP is a policy-based program loan that supports the government’s efforts to improve access to finance and to increase the contribution of the financial sector to economic growth.